August 12, 2016

The Spatial Science of Marketing Segmentation

PieChart-Segmentation-2During my undergraduate years as a geography and economics major, a professor shared his belief that everything in the world can be related to geography, because geography is the spatial science focused on where things are and why they occur there. Geographers seek to answer questions related to location, place, spatial pattern and interaction when studying a cultural or physical environment.

Organizations use geographic segmentation to divide their markets by area. Those areas include cities, counties, regions, countries and international regions, as well as rural, suburban and urban areas.

I believe that the single most important element in successful marketing is market segmentation. Others might assert the importance of research or creative execution or media frequency and reach. But to me, market segmentation—the spatial science of identifying the relationship of objects (populations) to space (the marketing mix)—is the primary driver of successful marketing communications. Don’t get me wrong, using research to drive branding and marketing is also important (see Using Research to Guide Branding Efforts), as is properly aligning creative execution (see Marketing Is Alive and Well) to brand positioning as well as delivering the right message at the right time to the right individuals with the right frequency. But market segmentation is critical.

Market segmentation involves dissecting a broad target market into submarkets of customers who have, or are perceived to have, common needs, interests and priorities, and then designing and implementing strategies to target them. The reason why segmentation is so important is that it allows marketers to pursue the right (i.e., large enough, most profitable) audiences with the right marketing mix (paid, owned and earned communication tactics)—one that highlights important points of product or service differentiation and customer benefits.

You can segment your market by a variety of variables:

  • Behavioral (attitudes and reactions to a product or service and its associated image)
  • Demographic (age, gender, marital status, income, religion, occupation, education and ethnicity)
  • Geographic (location, community type and climate)
  • Geodemographic (preferences and consumption habits of people who live close to one another)
  • Psychographic (lifestyle and personality characteristics)

Each market segment should be targeted with an appropriately designed and messaged mix of marketing communications—i.e., a specially tailored product, price, distribution network and promotional campaign. The ultimate goal of strategic market segmentation is to match the appropriate groups of customers with marketing efforts that create awareness, trial, repeated usage and loyalty to your brand, products and services.

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